US FX WRAP: Dollar dragged down by lower yields and oil prices

USD weakness returned as near-term hawkish bets eased on optimism over the reopening of the Strait of Hormuz. Oil prices tumbled, giving short-end notes the room to run higher, in turn, weighing on the dollar. Reporting suggests Iran and Oman are to make an announcement soon regarding their plan to manage the Strait of Hormuz; meanwhile, the Qatari's said language had been drafted for a possible US-Iran deal. Meanwhile, the latest labour data showed JOLTS falling more than expected in June to 7.359mln (exp. 7.45mln) with the quits rate unchanged and the vacancy rate moving slightly lower. Antipodes outperformed amid improved risk sentiment on equities, stronger-than-expected Household Spending data, and higher precious metal prices. ING writes that NZD/USD may remain around the 0.585-0.590 range for now, but a "September hike delivered with a slightly dovish tone could prompt some correction and open the door to a period of AUD outperformance relative to NZD".JPY strength took a break on Tuesday as volatile USD/JPY moves were absent. Main updates came via US Treasury Secretary Bessent, who largely reiterated his positive view of the currency and Japan's economy. He noted that the US would not have joined [in JPY intervention] if it was not optimistic about Japanese policies; it would do whatever it takes to support Japan. USD/JPY now trades around 157.79 from the Monday low of 155.226.